Already, Northwest has removed 1,400 disqualified
dependents since January, according to a Minneapolis Star
Tribune report. Starting Monday, it began a “dependent
audit” to weed out the rest. If the airline comes up
close to the average, it could disqualify 3,700
dependents, according to a recent internal memo to
employees, the newspaper said.. That’s similar to Ford
Motor Company’s experience, where the automaker forced
out about 60,000 from the 610,000 on its medical plans in
the past five years.

The audit could save Northwest about $8 million a
year, the memo said, out of the $400 million in
Northwest’s medical and dental costs this year. Some $61
million of that is being paid by its workers and
retirees.”Health care continues to be one of our most
rapidly growing costs,” Tim Meginnes, Northwest’s vice
president of employee benefits, said in the memo,
according to the Star Tribune. “Covering ineligible
dependents is expensive for you as a plan participant and
for NWA.”

Budco, based in Highland Park, Michigan., is
handling the Northwest audit. It’s an area of the
consulting firm’s business that has doubled or tripled
every year since 2003, according to Vice President
Michael Watson.The process at Northwest is typical for Budco in
which an initial random audit indicated problems. Then
the company scheduled a two-month amnesty period, when
employees could remove any relatives without penalty. By
the end of the period on March 10, about 1,400 dependents
had been cut, the company said.

Starting Monday, according to the paper, employees
and retirees will have to provide documentation for every
dependent. That could be marriage licenses, birth
certificates or college enrollment forms – because young
adults still in school are allowed to stay on their
family plans. This audit period goes through June.

If employees are found to have ineligible
dependents, they may have to repay the carrier for the
medical costs of these dependents, and even lose their
jobs, the newspaper said.

Ford Motor Co. began its dependents’ audits in
January 2000, said spokeswoman Marcey Evans. After two
amnesty periods in 2000 and 2001, the company instituted
ongoing random audits at all its US operations.

Like big automakers, big airlines see saving money
as a matter of survival. Northwest has lost $2.5 billion
on its operations since early 2001. All its cost-cutting
strategies so far have reduced its annual expenses by
$1.7 billion, the newspaper report said.